Blockchain 1.0

Insights for the first development of an electronic cash system started in the 1980s/1990s by a group labeled as “cypherpunks.” Believing that the future of the internet would be monitored and censored, cypherpunks attempted to develop an electronic cash system that would ensure privacy and preserve the open internet from an economic perspective. However, after multiple projects failed to overcome full decentralization and government intervention, these efforts set the groundwork for the launch of Bitcoin and Blockchain 1.0. Blockchain 1.0 technology incorporates nodes, peer to peer decentralization, wallet softwares, and mining rigs to keep the blockchain in function.

Blockchain 2.0

Building on top of the concepts of Blockchain 1.0, Blockchain 2.0 is centered around the rise of Ethereum. Integrating smart contracts, Ethereum was built as a medium for other decentralized applications or dApps to be established on. This expanded the playing floor as developers could now deploy smart contracts to the Ethereum blockchain in an open sourced, permissionless method. This led to the creation of decentralized finance (“DeFi”), decentralized autonomous organizations (“DAOs,” initial coin offerings (“ICOs”), and non-fungible tokens (“NFTs”).

Blockchain 3.0

A recent development of blockchain technology that is increasing scalability is allowing blockchains to transact with other blockchains. For example, the Cosmos ecosystem has permitted users to build interoperable applications that allow for connection among other chains through the inter-blockchain communication (“IBC”). However, what is in store for the future? Although there are no clear cut definitions of Blockchain 3.0, the main talking points appear to be the creation of solutions for services and industries outside of economics. As technology continues to develop and innovate, the potential for blockchain technology branching into other sectors appears limitless. While the development may be further than we think, blockchain technology can be integrated into supply chains, cybersecurity, voting, healthcare, and more. All of these industries have the potential to benefit from a scalable, centric ledger which would enhance traceability, increase efficiency while reducing disruptions, and improve security and transaction speed.

The opinions expressed in the CrossTower Classroom are those of the author(s) and not necessarily that of CrossTower. We appreciate diverse perspectives of our employees and we thank them for having a voice.